ALL of yesterday’s excitement about the US overtaking Saudi Arabia and Russia by 2017 to become the world’s biggest oil producer – and exceeding Russia to become the world’s biggest gas producer by 2015 – needs to be taken with a very large pinch of salt.

The release of the International Energy Agency (IEA) report, which made the above predictions, made fantastic headlines. But, as Fatih Birhol, the IEA’s chief economist concedes, the geology of shale and tight oil and gas in the US is “poorly known”.

Further, the American Petroleum Institute is careful to talk about the “opportunity” that hydraulic fracturing represents for America, rather that it being a sure thing.

Perception is crucial and so science can sometimes not matter. So, even if there is no significant risk to aquifers from the fracking process, as gas-industry experts have assured the blog, fears about pollution could still lead to regulation that holds-back production.

The large volumes of water consumed in the process might also lead to restrictions, even though, as we have also been assured, the problem can be resolved through investment in water purification and recycling.

Another unknown is how other energy producers might respond to the possible loss of their market influence.

Russia, if it can get its act together, has the reserves to prevent the US from becoming the world’s biggest gas producer.

Saudi Arabia might also (but this is as big a stretch as Russia tackling its corruption issues) find a solution to its electricity-generation conundrum. Exports of crude are forecast to decline on the increasing demand for fuel oil for power stations.

Cheap electricity is crucial for social stability in the Kingdom, hence soaring demand, poor conservation and therefore the predictions of declining crude shipments.

But Saudi Arabia has plenty of non-associated inland gas fields, and Saudi Aramco is heavily focused at the moment on raising gas production for power plants – although these gas reserves are sour and, as a result, will be expensive to process.

Perhaps Saudi Arabia could also end up importing liquefied natural gas (LNG), from countries including the US, given that supply is forecast to be abundant.

The Middle East, and many other regins of the world, might also successfully exploit their own shale-gas reserves.

To return to the issue of shale gas in the US, it has turned out to be a giant Ponzi scheme, as we discussed earlier this month

As Birhol said, the geology is unknown, leading to higher-than-anticipated production costs.

But as production costs have soared, so has output from the shale-gas fields, leading to US gas prices falling to a record low – thanks to the investment frenzy.

There is sure to be a consolidation in the US shale-gas industry, driving up long-term prices.

The US petrochemicals industry, despite all of these uncertainties, is surging ahead with new cracker investments. US-based vinyls producer Georgia Gulf is the latest producer to express interest in adding ethylene capacity.

The biggest other uncertainty is the health of the global economy. Where exactly, will all this new US resin and mono-ethylene glycol (MEG) be sold?

The IEA, in the same report that was released yesterday, made a confident prediction over one of the global economic uncertainties – China’s economic future.

“The report assumes a huge expansion in the Chinese economy, which it saw overtaking the US in purchasing power parity soon after 2015 and by 2020 using market exchange rates,” writes Reuters.

“Chinese real gross domestic product is expected to increase by 5.7% annually between 2011 and 2035.”

This assumption needs to be rigorously challenged in the scenario-planning process.